UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the Quarterly Period Ended June 30, 2000

                         Commission File Number: 0-30211

                                MINDFULEYE, INC.
         --------------------------------------------------------------
                            (formerly, RABATCO, INC.)
             (Exact name of registrant as specified in its charter)


      Nevada                                        87-0616344
------------------------                     -----------------------------
(Place of Incorporation)                        (IRS Employer ID Number)


         Suite 300- 355 Burrard St. Vancouver, British Columbia V6C 2G6
         --------------------------------------------------------------
              (Address of registrant's principal executive office)

                                  604-638-6800
         --------------------------------------------------------------
                         (Registrant's telephone number)

                                  Rabatco, Inc.
                      114 W. Magnolia Street. Suite 400-117
                          Bellingham, Washington 98225
       -------------------------------------------------------------------
             (Former name or address, if changed since last report)



Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes [X]   No  [ ]


Number of Shares of Common  Stock,  $0.001  Par Value,  Outstanding  at June 30,
2000: 13,815,000



<PAGE>


                                MINDFULEYE, INC.
                              For the Quarter Ended
                                  June 30, 2000
                              INDEX TO FORM 10-QSB

<TABLE>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
PART I - FINANCIAL INFORMATION.............................................................1

Item 1. Financial Statements:..............................................................1

       Consolidated Balance Sheets:
         - December 31, 1999 and June 30, 2000.............................................1

       Consolidated Statements of Operations:
        - For the Six Months and Three Months Ended June 30, 2000..........................2

       Consolidated Statements of Comprehensive Loss
        - For the Six Months and Three Months Ended June 30, 2000..........................3

      Consolidated Statements of Cash Flow
        - For the Six Months and Three Months Ended June 30, 2000..........................4

     Consolidated Statements of Stockholders Equity
        - For the Three Months Ended June 30, 2000.........................................5

Notes to Financial Statements .............................................................6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................................................18

PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS..............................................................18

ITEM 2.    CHANGES IN SECURITIES .........................................................19

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES................................................19

ITEM 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS..............................19

ITEM 5.    OTHER INFORMATION..............................................................19

ITEM 6.    EXHIBITS AND REPORTS ON FROM 8-K...............................................19

SIGNATURES................................................................................20

</TABLE>





<PAGE>


                         PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)

<TABLE>
=============================================================================================================================
                                                                                                    June 30,    December 31,
                                                                                                        2000            1999
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>              <C>
ASSETS

Current assets
    Cash and cash equivalents                                                                $     1,018,468  $        6,520
    Accounts receivable                                                                               24,417           1,661
    Prepaid expenses                                                                                   8,893              -
                                                                                             ---------------  -------------
Total current assets                                                                               1,051,778           8,181

Capital assets (Note 4)                                                                              209,844          23,662
                                                                                             ---------------  --------------
                                                                                             $     1,261,622  $       31,843
=============================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Accounts payable and accrued liabilities                                                 $        39,563  $       18,740
                                                                                             ---------------  --------------
    Total current liabilities                                                                         39,563          18,740

Long-term debt (Note 5)                                                                      $            -          214,093
                                                                                             ---------------  --------------
                                                                                                      39,563         232,833
                                                                                             ---------------  --------------

STOCKHOLDERS' EQUITY

    Capital stock (Note 8)
       Authorized
              100,000,000  common shares with a par value of $0.001

       Issued and outstanding
              March 31, 2000 - 13,815,000  common shares (1999 - 6,750,000)                           13,815               1

    Additional paid-in capital                                                                     2,170,920              -
    Cumulative translation adjustment                                                                    452              -
    Deficit accumulated during the development stage                                                (963,128)       (200,991)
                                                                                             ---------------- --------------
    Total Stockholders' Equity                                                                     1,222,059        (200,990)
                                                                                             ---------------  --------------
                                                                                             $     1,261,622  $       31,843
=============================================================================================================================
</TABLE>


History and organization of the Company (Note 1)

                 The accompanying notes are an integral part of
                    these consolidated financial statements



                                       1
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
 (A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)

<TABLE>
==============================================================================================================================
                                                                                 Cumulative
                                                                               Amounts from
                                                                                   July 21,
                                                                                       1999
                                                                                   (Date of      Three Month        Six Month
                                                                              Inception) to    Period Ended      Period Ended
                                                                                   June 30,         June 30,         June 30,
                                                                                       2000             2000             2000
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>              <C>              <C>
OPERATING EXPENSES
    Amortization                                                                     20,332           11,092           18,046
    Consulting fees                                                                 184,880           48,373           78,511
    Contract work                                                                     1,279               -                -
    Foreign exchange loss                                                             6,412               -              -
    Insurance                                                                           964              627              627
    Interest and bank charges                                                        10,987              904            6,651
    Investor relations                                                                2,217              328              328
     Marketing and brand development                                                 49,375           49,375           49,375
     Newsalert infeed services                                                       16,886           16,886           16,886
    Legal and audit fees                                                            126,897           90,466          117,645
    Office and miscellaneous                                                         66,519           28,661           52,239
    Rent and utilities                                                               42,865           16,601           36,086
    Stock based compensation expense                                                103,850          103,850          103,850
    Telephone and communications                                                     20,523            8,971           18,109
    Wages and benefits                                                              331,457          177,860          286,099
                                                                            ---------------  ---------------  ---------------
Loss before other item                                                             (985,443)        (553,994)        (784,452)
                                                                            ---------------  ---------------- ----------------


OTHER ITEM
    Interest income                                                                  22,315           18,199           22,315
                                                                            ---------------  ---------------  ---------------

                           Loss for the period                              $      (963,128) $      (535,795) $      (762,137)
==============================================================================================================================

Basic and diluted loss per share                                                             $        (0.04)  $        (0.07)
==============================================================================================================================

Weighted average number of shares outstanding                                                     13,815,000       11,284,973
==============================================================================================================================
</TABLE>




                 The accompanying notes are an integral part of
                    these consolidated financial statements


                                       2

<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in United States Dollars)
(Unaudited)

<TABLE>

==============================================================================================================================



                                                                                 Cumulative
                                                                               Amounts from
                                                                                   July 21,
                                                                                       1999
                                                                                   (Date of      Three Month        Six Month
                                                                              Inception) to     Period Ended     Period Ended
                                                                                   June 30,         June 30,         June 30,
                                                                                       2000             2000             2000
                                                                             ----------------   -------------  ---------------

<S>                                                                          <C>                <C>             <C>
Net loss                                                                     $     (963,128)    $   (535,795)   $    (762,137)
Other comprehensive income, net of tax:
   Foreign currency translation adjustments                                             452           (3,883)             452
                                                                             ----------------   -------------  ---------------

    Consolidated comprehensive loss                                          $     (962,676)    $   (539,678)   $    (761,685)
==============================================================================================================================

Basic and diluted comprehensive loss per share                                                  $      (0.04)   $       (0.07)
==============================================================================================================================

Weighted average number of shares outstanding                                                     13,815,000       11,284,973
==============================================================================================================================

</TABLE>

















                 The accompanying notes are an integral part of
                     these consolidated financial statements



                                       3
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)


<TABLE>

===========================================================================================================================
                                                                               Cumulative
                                                                             Amounts from
                                                                                 July 21,
                                                                                     1999
                                                                                 (Date of  Three Month           Six Month
                                                                            Inception) to     Period Ended    Period Ended
                                                                                 June 30,         June 30,        June 30,
                                                                                     2000             2000            2000
---------------------------------------------------------------------------------------------------------------------------

<S>                                                                        <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Loss for the period                                                    $     (963,128)   $    (535,795)   $   (762,137)
    Items not affecting cash:
       Amortization                                                                20,332           11,092          18,046
       Stock based compensation expense                                           103,850          103,850         103,850

    Changes in non-cash working capital items:
       Increase in accounts receivable                                            (24,417)         (15,542)        (22,756)
       Increase in prepaid expenses                                                (8,893)            (668)         (8,893)
       Decrease in due to related parties                                         (23,116)         (39,356)        (23,116)
       Increase in accounts payable and accrued liabilities                        36,063           33,994          17,323
                                                                           --------------    --------------   -------------
    Net cash used in operating activities                                        (859,309)        (442,425)       (677,683)
                                                                           --------------    --------------   -------------

                  CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of capital assets                                                (230,176)         (72,261)       (204,228)
    Acquisition of investment in subsidiary (net of cash acquired)              2,257,500                -       2,257,500
                                                                           --------------    --------------   -------------
    Net cash provided by (used in) investing activities                         2,027,324          (72,261)      2,053,272
                                                                           --------------    --------------   -------------


CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from issuance of common stock                                              1                -               -
    Due to related parties                                                       (150,000)        (100,000)       (150,000)
    Repayment of long-term debt                                                         -                -        (214,093)
                                                                           --------------    --------------   -------------
    Net cash used in financing activities                                        (149,999)        (100,000)       (364,093)
                                                                           --------------    --------------   -------------

Change in cash and cash equivalents for the period                              1,018,016         (614,686)      1,011,496

Effect of exchange rates on cash and cash equivalents                                 452           (3,883)            452

Cash and cash equivalents, beginning of period                                          -        1,637,037           6,520
                                                                           --------------    --------------   -------------
Cash and cash equivalents, end of period                                   $    1,018,468  $     1,018,468  $    1,018,468
===========================================================================================================================
</TABLE>


Supplemental disclosure with respect to cash flows (Note 9)

                 The accompanying notes are an integral part of
                     these consolidated financial statements



                                       4
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited)


<TABLE>
=============================================================================================================================
                                                                                      Deficit
                                                                                  Accumulated
                                                                   Additional      During the     Cumulative           Total
                                                                      Paid-in     Development    Translation   Stockholders'
                                       Shares          Amount         Capital           Stage     Adjustment          Equity
-----------------------------------------------------------------------------------------------------------------------------

<S>                                   <C>           <C>           <C>             <C>            <C>            <C>
Balance, July 21, 1999                      -       $       -     $        -      $         -     $       -     $          -

    Common stock issued                   160               1              -                -             -                1

    Loss for the period                     -               -              -         (200,991)            -         (200,991)
                                  ------------      -----------   -------------   -------------   -----------   -------------

Balance, December 31, 1999                160               1              -         (200,991)            -         (200,990)


    Common stock issued                    53               -              -                -             -                -
                                  ------------      -----------   -------------   -------------   -----------   -------------

Balance, March 13, 2000                   213               1              -         (200,991)            -         (200,990)

    Capital stock of
       MindfulEye.com at
       March 13, 2000                    (213)             (1)             1                -             -                -

    Capital stock of
       MindfulEye at
       March 13, 2000               6,905,000               -              -                -             -                -

    Shares issued to acquire
       MindfulEye.com               6,910,000           6,910      2,073,974                -             -        2,080,884

    Adjustment to par value                 -           6,905         (6,905)               -             -                -

    Stock based
    Compensation expense                    -               -        103,850                -             -          103,850

     Loss for the period                    -               -               -        (762,137)          452         (761,685)



Balance at June 30, 2000           13,815,000     $    13,815    $  2,170,920    $   (963,128)      $   452      $ 1,222,059
=============================================================================================================================

</TABLE>




                 The accompanying notes are an integral part of
                    these consolidated financial statements.



                                       5
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development  Stage Company) NOTES TO THE CONSOLIDATED  FINANCIAL  STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================

1.   HISTORY AND ORGANIZATION OF THE COMPANY

     The Company was incorporated  under the laws of the state of Nevada on June
     16, 1977 with  authorized  common stock of 100,000 shares with par value of
     $0.25.  On June 20, 1998,  the  authorized  common  stock was  increased to
     100,000,000 shares with a par value of $0.001.

     On June 20, 1998, the Company completed a forward common stock split of one
     share of its  outstanding  stock  for five  shares.  This  report  has been
     prepared  showing  after stock split shares with a par value of $0.001 from
     its inception.

     The Company has been in the  development  stage since its inception and has
     been  primarily  engaged in the business of developing  mining  properties.
     During 1982,  the Company  abandoned its  remaining  assets and settled its
     liabilities and since that date remained inactive until March 2000.

     Effective  March 13,  2000,  the  Company  acquired  all of the  issued and
     outstanding    common    stock    of    MindfulEye.com     Systems,    Inc.
     ("MindfulEye.com"). MindfulEye.com was incorporated on July 21, 1999, under
     the laws of British  Columbia.  MindfulEye.com  is in the development stage
     and is currently developing a subscription-based service for the retail and
     institutional   investment  community  that  delivers  proprietary  content
     directly to subscribers by wireless devises, fax, e-mail and the web.

     The  company  changed  its name from  Rabatco,  Inc.  to  MindfulEye,  Inc.
     ("MindfulEye") on May 12, 2000.

     The  accompanying  financial  statements  have been prepared by the Company
     without audit. In the opinion of management, all adjustments (which include
     only  normal  recurring   adjustments)  necessary  to  present  fairly  the
     financial position, results of operations,  changes in stockholders' equity
     and cash flows at June 30,  2000 and for the  periods  then ended have been
     made.  These financial  statements  should be read in conjunction  with the
     audited financial statements of the Company for the year ended December 31,
     1999.  The results of operations for the period ended June 30, 2000 are not
     necessarily  indicative  of the results to be expected  for the year ending
     December 31, 2000.

2.   BASIS OF PRESENTATION

     These financial  statements contain the financial  statements of MindfulEye
     and  MindfulEye.com  presented on a consolidated  basis. On March 13, 2000,
     MindfulEye  acquired  all of the issued and  outstanding  share  capital of
     MindfulEye.com  by issuing 6,910,000 common shares (Note 6). As a result of
     the share exchange,  control of the combined companies passed to the former
     shareholders  of  MindfulEye.com.  This  type of  share  exchange  has been
     accounted for as a capital transaction accompanied by a recapitalization of
     MindfulEye.com.   Recapitalization   accounting   results  in  consolidated
     financial  statements  being  issued  under  the  name  MindfulEye  but are
     considered a continuation  of  MindfulEye.com.  As a result,  the financial
     statements  presented represent the consolidated  financial position of the
     above  companies as at June 30, 2000 and the results of operations and cash
     flows of MindfulEye.com for the period from July 21, 1999 to March 31, 2000
     and the results of operations and cash flows of MindfulEye  from its deemed
     date of acquisition  during the period. The number of shares outstanding at
     June 30, 2000 as presented are those of MindfulEye.



                                       6
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


3.   SIGNIFICANT ACCOUNTING POLICIES

     Principles of consolidation

     The  consolidated   financial  statements  include  MindfulEye,   Inc.  and
     MindfulEye.com  Systems,  Inc. All  significant  intercompany  balances and
     transactions have been eliminated upon consolidation.

     Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that  affect the  reported  amount of assets and  liabilities,
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amount of revenues  and  expenses
     during the period. Actual results could differ from these estimates.

     Cash and cash equivalents

     Cash and cash equivalents  include highly liquid  investments with original
     maturities of three months or less.

     Loss per share

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial  Accounting  Standards  No. 128,  "Earnings  Per Share" ("SFAS
     128").  Under  SFAS 128,  basic and  diluted  earnings  per share are to be
     presented.  Basic  earnings  per  share  is  computed  by  dividing  income
     available to common  shareholders by the weighted  average number of common
     shares  outstanding  in the period.  Diluted  earnings per share takes into
     consideration common shares outstanding  (computed under basic earnings per
     share) and potentially dilutive common shares.

     Income taxes

     Income  taxes are  provided  in  accordance  with  Statement  of  Financial
     Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes". A
     deferred tax asset or liability is recorded for all  temporary  differences
     between  financial and tax reporting and net operating loss  carryforwards.
     Deferred tax expenses  (benefit) result from the net change during the year
     of deferred tax assets and liabilities.

     Deferred  tax assets are  reduced by a  valuation  allowance  when,  in the
     opinion of management,  it is more likely than not that some portion or all
     of the deferred  tax assets will not be  realized.  Deferred tax assets and
     liabilities  are  adjusted for the effects of changes in tax laws and rates
     on the date of enactment.

     Accounting for derivative instruments and hedging activities

     In June 1998, the Financial  Accounting standards Board issued Statement of
     Financial  Accounting  Standards  No. 133  ("SFAS  133"),  "Accounting  for
     Derivative Instruments and Hedging Activities" which establishes accounting
     and  reporting  standards  for  derivative   instruments  and  for  hedging
     activities.  SFAS 133 is effective for all fiscal  quarters of fiscal years
     beginning  after June 15, 1999.  In June 1999,  the FASB issued SFAS 137 to
     defer the  effective  date of SFAS 133 to fiscal  quarters of fiscal  years
     beginning  after June 15, 2000.  The Company does not  anticipate  that the
     adoption of the statement  will have a significant  impact on its financial
     statements.



                                       7
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


3.   SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)

     Stock-based compensation

     Statement  of  Financial  Accounting  Standards  No. 123,  "Accounting  for
     Stock-Based  Compensation,"  encourages, but does not require, companies to
     record  compensation cost for stock-based  employee  compensation  plans at
     fair value. The Company has chosen to account for stock-based  compensation
     using  Accounting  Principles  Board Opinion No. 25,  "Accounting for Stock
     Issued to Employees."  Accordingly  compensation  cost for stock options is
     measured as the excess, if any, of the quoted market price of the Company's
     stock at the date of the grant over the amount an  employee  is required to
     pay for the stock.

     The Company accounts for stock-based  compensation  issued to non-employees
     in accordance  with the provisions of SFAS 123 and the Emerging Issues Task
     Force  consensus in Issue No. 96-18 (EITF 96-18"),  "Accounting  for Equity
     Instruments  that are Issued to Other Than  Employees  for  Acquiring or in
     Conjunction with Selling, Goods or Services".

     Comprehensive income

     In 1998, the Company adopted  Statement of Financial  Accounting  Standards
     No. 130 ("SFAS 130"),  "Reporting  Comprehensive  Income".  This  statement
     establishes  rules  for  the  reporting  of  comprehensive  income  and its
     components.

     Financial instruments

     The Company's  financial  instruments consist of cash and cash equivalents,
     accounts  receivable,  accounts payable and accrued  liabilities,  and long
     term debt.  Unless  otherwise  noted, it is  management's  opinion that the
     Company is not exposed to  significant  interest,  currency or credit risks
     arising from these financial instruments. The fair value of these financial
     instruments approximate their carrying values, unless otherwise noted.

     Foreign currency translation

     Translation  amounts  denominated in foreign currencies are translated into
     United States currency at exchanges rates prevailing at transactions dates.
     Carrying  values of monetary  assets and  liabilities  are adjusted at each
     balance  sheet date to reflect the  exchange  rate at that date.  Gains and
     losses from restatement of foreign currency monetary assets and liabilities
     are included in income.

     Capital assets and amortization

     Capital  assets  are  recorded  at  cost  less  accumulated   amortization.
     Amortization  is being provided for annually,  using the declining  balance
     method at the following rates:

        Computer software                                     100%
        Computer hardware                                     30%
        Furniture and equipment                               20%

     Leasehold improvements are amortized over the period of the lease.



                                       8
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


3.   SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)

     Disclosure about segments of an Enterprise and related information

     Statement  of  Financial  Accounting  Standards  No.  131 ("SFAS  131"),  "
     Disclosure  About  Segments  of  an  Enterprise  and  Related  information"
     requires  use of  management  approach  model for  segment  reporting.  The
     management  approach  model  is  based  on the way a  company's  management
     organizes  segments within the company for making  operating  decisions and
     assessing  performance.  Reporting  segments  are  based  on  products  and
     services,  geography,  legal structure,  management structure, or any other
     manner in which the management disaggregates a company. Currently, SFAS 131
     has no effect on the company's financial statements as substantially all of
     the company's operations are conducted in one industry segment in Canada.

4.   CAPITAL ASSETS

<TABLE>

     ======================================================================================================
                                                                                        Net Book Value
                                                                             ------------------------------
                                                                Accumulated        June 30,    December 31,
                                                      Cost     Amortization            2000            1999
     ------------------------------------------------------------------------------------------------------
    <S>                                      <C>              <C>              <C>             <C>
     Computer hardware                       $     138,254    $     12,202     $   126,052     $   20,565
     Computer software                              10,703           4,069           6,634          3,097
     Leasehold improvements                          9,354             468           8,886              -
     Furniture and equipment                        71,865           3,593          68,272              -
                                             --------------   -------------    ------------    -----------
                                             $     230,176    $     20,332     $   209,844     $   23,662
     ======================================================================================================
</TABLE>


5.   LONG TERM DEBT

<TABLE>
    =====================================================================================================================
                                                                                               June 30,     December 31,
                                                                                                   2000             1999
    ---------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>            <C>
    Notepayable to a related  party, bearing interest at the Bank of
        Montreal prime rate plus 2%, or 10% if undeterminable; secured;
        repayable on either receipt of proceeds from second round Phase II
        Equity financing or Initial Public Offering, whichever is earlier.                   $       -      $    214,093
    =====================================================================================================================
</TABLE>



                                       9
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


6.   RECAPITALIZATION

     On March 13, 2000, the Company  acquired all of the issued and  outstanding
     share  capital of  MindfulEye.com.  As  consideration,  the Company  issued
     6,910,000  shares  at a deemed  value  of  $1,930,883  and  paid  $150,000.
     Legally, the Company is the parent of MindfulEye.com.  However, as a result
     of the share exchange  described above,  control of the combined  companies
     passed to the former  shareholders  of  MindfulEye.com.  This type of share
     exchange has been accounted for as a capital  transaction  accompanied by a
     recapitalization  of  MindfulEye.com,  rather than a business  combination.
     Accordingly,  the net  assets of  MindfulEye.com  will be  included  in the
     balance sheet at book values and the deemed acquisition of the Company will
     be accounted for by the purchase  method with the net assets of the Company
     recorded at fair market value at the date of acquisition.  The revenues and
     expenses and assets and liabilities  reflected in the financial  statements
     prior to the date of acquisition are those of  MindfulEye.com.  Revenue and
     expenses and assets and  liabilities  subsequent to the date of acquisition
     include the accounts of the Company.

     The  cost of an  acquisition  should  be  based  on the  fair  value of the
     consideration given, except where the fair value of the consideration given
     is not clearly  evident.  In such a case,  the fair value of the net assets
     acquired is used.

     The 6,910,000  common shares issued pursuant to the  acquisition  agreement
     were  deemed to have a value of  $1,930,883  based on the fair value of the
     Company's net assets.

     The total purchase price of $2,080,833 was allocated as follows:

              Cash                                            $    2,257,500
              Due to related parties                                (173,117)
              Accounts payable and accrued liabilities                (3,500)
                                                              --------------
                                                              $    2,080,883

7.   STOCK OPTIONS AND WARRANTS

     The following stock options were outstanding at June 30, 2000.

       ========================================================================
                Number                 Exercise
               of shares                Price                 Expiry date
       ------------------------------------------------------------------------
             1,815,000                    $3.50              June 7, 2002
       ========================================================================

     The following warrants were outstanding at June 30, 2000.

       ========================================================================
                Number                 Exercise
               of shares                Price                 Expiry date
       ------------------------------------------------------------------------
             537,500                    $ 2.10               March 20, 2001
                                 then at $2.50               March 20, 2002
       ========================================================================



                                       10
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


8.   CAPITAL STOCK

     As  a  result  of  the  recapitalization   described  in  Note  6,  whereby
     MindfulEye.com  is deemed to be the acquiror for accounting  purposes,  the
     number and value of common shares issued and  outstanding  at June 30, 2000
     are MindfulEye's.

9.   SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

<TABLE>
        =================================================================================
                                                               June 30,     December 31,
                                                                   2000             1999
        ---------------------------------------------------------------------------------
        <S>                                                 <C>             <C>
        Cash paid during the period for interest            $       -       $         -
        Cash paid during the period for income taxes                -                 -
        =================================================================================
</TABLE>

     The following  non-cash  transaction  occurred  during the six month period
     ended June 30, 2000:

     a)   The company issued 6,910,000 shares at a deemed value of $1,929,365 to
          acquire 100% of the outstanding shares of MindfulEye.com.


10.  STOCK BASED COMPENSATION EXPENSE

     Statement  of  Financial  Accounting  Standards  No. 123,  "Accounting  for
     Stock-Based  Compensation"  encourages  but does not require  companies  to
     record  compensation cost for stock-based  employee  compensation  plans at
     fair value. The Company has chosen to account for stock-based  compensation
     using  Accounting  Principles  Board Opinion No. 25,  "Accounting for Stock
     Issued to Employees".  Accordingly,  compensation cost for stock options is
     measured as the excess,  if any, of quoted  market  price of the  Company's
     stock at the date of grant over the option price.

     The Company  accounts for stock issued to  non-employees in accordance with
     the provisions of SFAS 123 and the Emerging  Issues Task Force consensus in
     Issue No.  96-18,  "Accounting  for Equity  Instruments  that are Issued to
     Other Than Employees for Acquiring or in Conjunction  with Selling Goods or
     Services".

     Following is a summary of the status of the plan during 2000.

<TABLE>
        ==================================================================================================
                                                                                  Number         Weighted
                                                                               of Shares          Average
                                                                                                 Exercise
                                                                                                    Price
        --------------------------------------------------------------------------------- ----------------
        <S>                                                                    <C>           <C>
        Outstanding at December 31, 1999                                               -     $          -
        Granted                                                                1,815,000             3.50
        Forfeited                                                                      -                -
        Exercised                                                                      -                -
                                                                             -----------
        Outstanding at June 30, 2000                                           1,815,000     $       3.50
        ==================================================================================================
        Weighted average fair value of options granted during the period                     $       1.14
        ==================================================================================================
</TABLE>




                                       11
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


10.  STOCK BASED COMPENSATION EXPENSE (cont'd.....)

     Following is a summary of the status of the options outstanding at June 30,
     2000:

<TABLE>
   =====================================================================================================================

                                                        Outstanding Options                   Exercisable Options
                                             ---------------------------------------------------------------------------
                                                                 Weighted
                                                                  Average      Weighted                        Weighted
                                                                Remaining       Average                         Average
                                                              Contractual      Exercise                        Exercise
   Exercise Price                                  Number            Life         Price        Number             Price
   --------------------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>        <C>                 <C>            <C>
   $3.50                                        1,815,000           1.94      $    3.50        52,500        $     3.50
   =====================================================================================================================
</TABLE>

     Compensation

     The  Company  granted  550,000  options to  consultants  during the current
     period  which are  accounted  for  under the  Emerging  Issues  Task  Force
     Consensus in Issue No. 96-18.  Accordingly,  using the Black-Scholes option
     pricing  model,  the  options are marked to fair value  through  charges to
     operations as stock-based compensation. Stock-based compensation recognized
     pursuant to EITF 96-18  during the six month period ended June 30, 2000 was
     $103,850.  This amount can be allocated to the other expense  categories in
     the accompanying statements of operations as consulting fees of $103,850.

     The  Company  granted  1,265,000  options to  employees  during the current
     period,  which are accounted for using Accounting  Principles Board Opinion
     No.  25,  "Accounting  for Stock  Issued to  Employees".  Had  compensation
     expense relating the 1,265,000 options granted to employees been recognized
     on the basis of fair value  pursuant to Statement  of Financial  Accounting
     Standard No. 123,  net loss and loss per share would have been  adjusted as
     follows:

<TABLE>
        ===========================================================================================
                                                                  Three Month            Six Month
                                                                 Period Ended         Period Ended
                                                                     June 30,             June 30,
                                                                         2000                 2000
        ---------------------------------------------------------------------- --------------------
<S>                                                           <C>                  <C>
        Loss for the period
           As reported                                        $     (535,795)      $     (762,137)
                                                              ====================================
           Pro forma                                          $     (604,372)      $     (830,714)
                                                              ====================================
        Basic and diluted loss per share
           As reported                                        $        (0.04)      $        (0.07)
                                                              ====================================
           Pro forma                                          $        (0.04)      $        (0.07)
        ===========================================================================================
</TABLE>



                                       12
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


10.  STOCK BASED COMPENSATION EXPENSE (cont'd....)

     The fair value of each option granted is estimated  using the Black Scholes
     Model. The assumptions used in calculating fair values are as follows:

     ===========================================================================
                                                         2000             1999
     ---------------------------------------------------------------------------
     Risk free interest rate                           6.616%               -
     Expected life of the options                    2 years                -
     Expected volatility                              103.93%               -
     Expected dividend yield                               -                -
     ===========================================================================


11.  RELATED PARTY TRANSACTIONS

     The Company  entered into the following  transactions  with related parties
     during the six month period ended June 30, 2000:

     a)   Paid or accrued $33,409 to director and an officer for consulting fees
          (December 31, 1999 - $95,943).

     b)   Included in long-term  debt is an amount of $Nil  (December 31, 1999 -
          $214,093) which is payable to a director of the Company.

     c)   Included in accounts  payable and accrued  liabilities is an amount of
          $9,436  (December  31, 1999 - $5,571) which is payable to directors of
          the Company.

     d)   The Company repaid $100,000 for amounts due to related parties.


12.  COMMITMENTS

     a)   The Company  leases office  premises  pursuant to an operating  lease,
          which expires in 2005. Future annual lease payments are as follows:


                   2001                          $      93,740
                   2002                                 95,402
                   2003                                100,387
                   2004                                100,387
                   2005                                 75,290
                                                 -------------
                                                 $     465,206
                                                 =============



                                       13
<PAGE>

MINDFULEYE, INC.
(FORMERLY RABATCO, INC.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JUNE 30, 2000
================================================================================


13.  INCOME TAXES

     The Company's total deferred tax asset is as follows:

<TABLE>
     =================================================================================================
                                                                            June 30,     December 31,
                                                                                2000             1999
     -------------------------------------------------------------------------------------------------
     <S>                                                                <C>             <C>
     Tax benefit of net operating loss carryforward                     $    327,463    $      68,337
     Valuation allowance                                                    (327,463)         (68,337)
                                                                        -------------   --------------
                                                                        $          -    $           -
     =================================================================================================
</TABLE>

     The  Company  has  a  net  operating  loss  carryforward  of  approximately
     $963,128,  which  expires  in 2019 and 2020.  The  Company  provided a full
     valuation  allowance on the deferred tax asset  because of the  uncertainty
     regarding realizability

14.  ACCUMULATED OTHER COMPREHENSIVE LOSS

     Total  comprehensive loss for the six month period ended June 30, 2000, and
     the period from July 21, 1999 to June 30, 2000 was $761,685  and  $962,676,
     respectively. The only item included in other comprehensive loss is foreign
     currency  translation  adjustments in the amounts of $452 for the six month
     period  ended June 30,  2000 and $452 for the period  from July 21, 1999 to
     June 30, 2000.

<TABLE>
    ================================================================================================
                                                                         Foreign        Accumulated
                                                                        Currency              Other
                                                                     Translation      Comprehensive
                                                                      Adjustment             Income
    ------------------------------------------------------------------------------------------------
   <S>                                                             <C>                <C>
    Beginning balance, December 31, 1999                           $          -       $          -

    Current period change                                                   452                452
                                                                   -------------      --------------
    Ending balance, June 30, 2000                                  $        452       $        452
    ================================================================================================
</TABLE>


15.  UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

     The Year 2000 Issue arises because many computerized systems use two digits
     rather than four to identify a year.  Date-sensitive  systems may recognize
     the  year  2000 as 1900  or some  other  date,  resulting  in  errors  when
     information  using  year 2000  dates is  processed.  In  addition,  similar
     problems  may arise in some  systems,  which use  certain  dates in 1999 to
     represent  something  other  than a date.  Although  the change in date has
     occurred,  it is not possible to conclude that all aspects of the Year 2000
     Issue that may affect the entity,  including  those  related to  customers,
     suppliers, or other third parties, have been fully resolved.



                                       14
<PAGE>

      ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Except  for  disclosures  that  report the  Company's  historical  results,  the
statements set forth in this section contain forward-looking  statements.  Words
or phrases  "will likely  result",  "are  expected  to",  "will  continue",  "is
anticipated",  "estimate",  "project or projected",  or similar  expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995.

Actual results could differ  materially form those projected in  forward-looking
statements.  Additional  information and factors that could cause actual results
to differ materially from those in the forward-looking  statements are set forth
in this Form 10-QSB. The Company desires to take advantage of certain provisions
in the Private  Securities  Litigation  Reform Act of 1995, which provide a safe
harbor for forward-looking  statements made by or on behalf of the Company.  The
Company hereby cautions stockholders,  prospective investors in the Company, and
other readers to not place undue reliance on these  forward-looking  statements,
which can only address known events as of the date of this report.

General Overview

Mindfuleye,  Inc. (formerly Rabatco,  Inc.)(the "Company" or "Mindfuleye"),  was
incorporated  under the laws of the State of Nevada on June 16,  1977.  From the
Company's  inception in 1977 through 1982, the Company was primarily  engaged in
the business of mineral resource exploration. The Company remained inactive from
1982 to 1998.  On March 13,  2000,  the Company  completed  the  acquisition  of
MindfulEye.com  Systems,  Inc.,  a company  engaged in the  business of Internet
software and technology  research and development.  On May 12, 2000, the Company
changed its name to MindfulEye, Inc.

The  financial  statements  presented  in  this  report  contain  the  financial
statements  of  Mindfuleye,   Inc.  and  MindfulEye.com   Systems,   Inc.  on  a
consolidated basis. The Company's  acquisition of MindfulEye.com  Systems,  Inc.
has  been   accounted   for  as  a   capital   transaction   accompanied   by  a
recapitalization  of  MindfulEye.com  Systems,  Inc. As a result,  the financial
statements   presented   represent  the  consolidated   financial   position  of
Mindfuleye,  Inc. and  MindfulEye.com,  Systems,  Inc. as at June 30, 2000,  the
results of operations  and cash flows of  MindfulEye.com  Systems,  Inc. for the
period from July 21, 1999 to June 30,  2000 and the  results of  operations  and
cash flows of MindfulEye from its deemed date of acquisition during the period.

Mindfuleye is in the process of completing the  development of a technology that
is designed to provide subscribers to its service sources  topic-related content
available on the Internet.  The first subscriber service that Mindfuleye intends
to provide is designed to monitor the content on investor  related  Internet web
sites for  information  of interest  to  subscribers  in the  investment-related
communities. Mindfuleye's technology is designed to:

     -    browse and monitor Internet website for specific types of information,
          including  chat room  discussions,  newswire  postings  and  published
          reports;
     -    rank it for sentiment using Artificial  Intelligence  (AI) technology;
          and
     -    deliver it to subscribers in a summarized format.

Mindfuleye  intends to use  artificial  computer  intelligence  to rank investor
information  based on the  nature  of the  comments,  reports,  news  and  other
information and present this information in a "Moodindex" or "Moodscore."

Once the technology is fully developed, the Company anticipates that subscribers
will  be  able to  select  a  number  of  delivery  options  for  receiving  the
information  it collects,  including  cell phone,  pager,  email,  web, fax, and
instant  messaging.  The  Company  anticipates  that it will be able to  deliver
sourced  content  shortly after being  discovered,  batched in time periods,  or
summarized in daily reports.

Mindfuleye's system is being developed in a modular fashion so that each content
source will have a dedicated  collection  system that will permit  Mindfuleye to
add new information  sources or "feeds" quickly as they become  available.  This
modular architecture also assists in the massive scaling of the system.

Mindfuleye has not fully completed the development of the technology  related to
the services that it intends to provide,  and Mindfuleye  cannot assure you that
it will successfully  complete such development or that its subscription service
will be commercially successful.



                                       15
<PAGE>

The  following   discussion  and  analysis  explains   Mindfuleye's  results  of
operations  for the  three-month  fiscal  quarter from April 1, 2000 to June 30,
2000. You should review the  discussion  and analysis of financial  condition in
conjunction  with  Mindfuleye's  financial  statements and the related notes, as
well as statements  detailed in Mindfuleye's  Securities and Exchange Commission
filings.

Results of Operations

     Fiscal Quarter Ended June 30, 2000

Revenues.  Mindfuleye  unofficially  launched  the beta  version of its  website
during the quarter ended June 30, 2000.  Mindfuleye  expects to launch the final
version of its web site and subscription-based service during the fourth quarter
2000.  During the quarter ended June 30, 2000,  Mindfuleye  did not generate any
revenue from its  operations.  Mindfuleye  had interest  income in the amount of
$18,199.

Expenses.  During the fiscal  quarter ended June 30, 2000,  Mindfuleye  incurred
total expenses of $553,994 related primarily to: (i) research and developing its
web technologies  (ii) marketing and brand  development  (iii)  professional and
legal fees relating to its Securities and Exchange  Commission  reports and (iv)
general overhead and administrative expenses. During the quarter Mindfuleye paid
consulting fees in the amount of $48,373 which included fees paid to (i) Everest
Advisory Group Inc., for the services of Julian Remedios as  Mindfuleye's  chief
financial  officer  and (ii) fees paid to Tod Maffin  Inc.  relating  to general
consulting services. Mindfuleye paid legal and accounting fees of $90,466 during
the fiscal  quarter  ended June 30, 2000 related to  preparation  of its filings
with the Securities and Exchange Commission, patent searches and other corporate
and  accounting   matters.   Mindfuleye   incurred  other  expenses,   including
amortization expenses of $11,092,  insurance expenses of $627, interest and bank
charges expenses of $904,  investor  relations  expenses of $328,  marketing and
brand  development  expenses of $49,375,  infeed  services  expenses of $16,886,
office and  miscellaneous  expenses of $28,661,  rent and utilities  expenses of
$16,601,  wages  expenses  of $177,860  and  non-cash  stock based  compensation
expenses of $103,850.

Mindfuleye anticipates that expenses relating to the development of its web site
will increase  substantially during the third and the fourth quarters of 2000 as
it plans to  launch  its  official  web site and  subscription  based  services.
Mindfuleye also anticipates  that expenses  relating to marketing and sales will
increase during the third and forth quarter of 2000 as it continues an extensive
campaign  to market and  promote the  MindfulEye.com  website  and  subscription
services.

Net Loss.  Mindfuleye  had a net loss of $535,795 for the fiscal  quarter  ended
June 30, 2000.

Six Month Period Ended June 30, 2000

Revenues.  Mindfuleye  unofficially  launched  the beta  version of its  website
during the six month period  ended June 30, 2000.  During six month period ended
June 30, 2000,  Mindfuleye  did not  generate  any revenue from its  operations.
Mindfuleye had interest income in the amount of $22,315.

Expenses.  During the six month period ended June 30, 2000,  Mindfuleye incurred
total expenses of $784,452 related primarily to: (i) research and developing its
web technologies  (ii) marketing and brand  development  (iii)  professional and
legal fees relating to its Securities and Exchange  Commission  reports and (iv)
general overhead and administrative expenses.  During the period Mindfuleye paid
consulting fees in the amount of $78,511 which included fees paid to (i) Everest
Advisory Group Inc., for the services of Julian Remedios as  Mindfuleye's  chief
financial  officer  and (ii) fees paid to Tod Maffin  Inc.  relating  to general
consulting  services.  Mindfuleye  paid legal and  accounting  fees of  $117,645
during six month  period  ended June 30,  2000  related  to  preparation  of its
filings with the Securities and Exchange  Commission,  patent searches and other
corporate and accounting matters. Mindfuleye incurred other expenses,  including
amortization expenses of $18,046,  insurance expenses of $627, interest and bank
charges expenses of $6,651,  investor relations expenses of $328,  marketing and
brand  development  expenses of $49,375,  infeed  services  expenses of $16,886,
office and  miscellaneous  expenses of $52,239,  rent and utilities  expenses of
$36,086,  wages  expenses  of $286,099  and  non-cash  stock based  compensation
expenses of $103,850.

Net Loss.  Mindfuleye  had a net loss of $762,137 for the six month period ended
June 30, 2000.



                                       16
<PAGE>

Plan of Operation

During Mindfuleye's fiscal quarter ended June 30, 2000,  Mindfuleye launched the
beta-version of its web site.  Mindfuleye  anticipates the officially  launch of
its web site will occur  during the fourth  quarter  2000,  and intends to begin
accepting subscribers to its services.

After the  official  launch of its website,  Mindfuleye  intends to focus on (i)
intensifying  its  marketing  and  promotional  efforts  for the  MindfulEye.com
website and brand  development;  (ii) developing  strategic  relationships  with
other Internet providers;  (iii) obtaining subscribers for its services and (iv)
developing and expanding its website offerings.

Capital Requirements

Mindfuleye  anticipates its operating budget to implement its plan of operations
and to meet its  financial  obligations  during the remainder of its fiscal year
ending December 31, 2000, will be as follows:

<TABLE>
                                                                      PERIOD
                                                     -----------------------------------------
                                                                Fiscal Quarter Ended
                                                     -----------------------------------------
                 DESCRIPTION                         September 30,              December 30
                                                          2000                     2000
----------------------------------------------------------------------------------------------
<S>                                                    <C>                       <C>
Technology & product development                       $163,000                  $180,000
Marketing and brand development                        $100,000                  $120,000
Salaries & benefits - management and office            $130,000                  $130,000
In-feed charges from third parties                      $32,000                   $28,000
Legal, regulatory filings and accounting                $39,000                   $34,000
Office and administration                               $51,000                   $51,000
Investor relations                                      $50,000                   $50,000
Insurances                                              $10,000                   $10,000
Capital equipment                                       $55,000                   $15,000
                                                     -----------------------------------------
Totals                                                 $630,000                  $618,000
</TABLE>


Liquidity and Capital Resources

As at June 30,  2000,  Mindfuleye  had working  capital on hand in the amount of
$1,012,215.  Mindfuleye had cash or cash  equivalents  of  $1,018,468,  accounts
receivables  of $24,417  and  prepaid  expenses  and  deposits  in the amount of
$8,893. Mindfuleye had accounts payable and accrued liabilities in the amount of
$39,563.

Mindfuleye  anticipates  that its working  capital is  sufficient to satisfy its
cash requirements through to October 31, 2000. Mindfuleye anticipates it will be
required  to raise  financing  during or prior to the fourth  quarter of 2000 to
allow the company to expand its operations in 2001. Mindfuleye  anticipates that
it will be required to raise at least  $300,000  during  fiscal year 2000 and an
additional  $3,000,000  to  meet  its  anticipated  expansion  to the  Company's
operations for marketing, developing technology,  applications and products, for
the year 2001. Mindfuleye has no arrangements for financing, and there can be no
assurance that it will successful acquire sufficient  financing to fund its plan
of operation on terms acceptable to Mindfuleye, if at all.

Mindfuleye  believes  its capital  requirement  estimates  are  reasonable.  The
capital  requirements  are only  estimates  and can  change  for many  different
reasons,  some  of  which  are  beyond  Mindfuleye's  control.  Mindfuleye  is a
development  stage company,  which means that it is in the process of developing
its  technologies  and that it currently  has no revenues  from its  operations.
Mindfuleye  anticipates that it will officially launch its website to the public
by the end of September  2000 and  marketing  its services to  subscribers  on a
subscription  fee basis.  Mindfuleye  currently has no subscribers  and earns no
income from its  operations.  Mindfuleye  does not  believe it will  receive any
significant  revenue from its  subscription  services until at least 2001. There
can be no assurance that  Mindfuleye  will  successfully  launch its web site as
planned  or that a  sufficient  number  of  subscribers  will  subscribe  to the
Mindfuleye  service  to  make  it  commercially  viable.   Mindfuleye  does  not
anticipate it will acquire or dispose of any significant equipment during 2000.



                                       17
<PAGE>

Product Research and Development

Mindfuleye  currently  develops all of its technologies  internally.  Mindfuleye
anticipates  it will spend  approximately  $1,500,000 to develop the  technology
related to its  MindfulEye.com  services and support  systems during the next 12
months.  Mindfuleye may also engage  consultants to assist with product research
and development.

The cost for  developing  technology  is expensive  and the process will require
testing  and  refinement.  Mindfuleye's  commercial  success  will depend on its
ability to attract subscribers to its services.  This will require Mindfuleye to
develop and use increasing sophisticated  technologies to generate,  sustain and
maintain user interest and satisfaction.

There can be no assurance that Mindfuleye will successfully develop and test the
technologies  related  to  it  services  on a  timely  basis,  if  at  all.  Any
substantial  delay  in  obtaining  the  required  financing  or  developing  the
MindfulEye  services  and the  support  services  for  subscribers  would have a
materially adverse effect on Mindfuleye's business and results of operations.

Personnel

As at June 30, 2000,  Mindfuleye had 13 employees,  including 7 programmers  and
developers,  who  assist us in  development  of its  business  and its  internal
operating and  information  systems,  and 6 employees who are engaged in general
and administrative and marketing functions.

Mindfuleye also engages independent  consultants to assist in the development of
its technologies and applications,  for public relations services,  NLP (natural
language   processing)   development,   marketing   services  and  communication
consulting.  Mindfuleye may also engage additional  consultants in the future to
assist  it  with  the  development  of  software  and  information  systems  and
implementation of its business plan.

Mindfuleye  anticipates that during 2000 it may hire up to 4 employees to assist
in the technology and product  applications  and two marketing and sales support
personnel.

Mindfuleye's  success  will  depend in large part on its  ability to attract and
retain skilled and experienced  employees and  consultants.  Mindfuleye does not
anticipate  any of its  employees  will be  covered by a  collective  bargaining
agreement.  Mindfuleye does not currently maintain key man life insurance on any
of its directors or executive officers.

Subsequent to June 30, 2000,  Mindfuleye hired 2 additional  employees to assist
in application development.

Inflation

Mindfuleye's  results of  operations  have not been  affected by  inflation  and
management  does  not  expect  inflation  to have a  significant  effect  on the
Company's operations in the future.

Dividends

The Company has not paid any dividends on its stock.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

          None.

ITEM 2.  CHANGES IN SECURITIES

          None.





                                       18
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

          None.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

          None.

ITEM 5.  OTHER INFORMATION

          None.

ITEM 6.  EXHIBITS AND REPORTS ON FROM 8-K

     (a)  Exhibits

Exhibit
Number          Description
------          -----------

 27.1           Financial Data Schedule


     (b)  Form 8K

     The  Company  filed no reports on Form 8-K for the  Quarter  ended June 30,
2000.











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<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.

Date: August 11, 2000


                                            MINDFULEYE, INC.


                                             /s/  Ray Torresan
                                            ------------------------------------
                                            Chairman of the Board of Directors,
                                            President


                                            /s/  Julian Remedios
                                            ------------------------------------
                                            Chief Financial Officer

















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